Short Line Holding Companies Describe Capital Spending Plans for 2023

Executives of three short line holding companies that do business in Ohio and its surrounding states outlined their respective capital spending plans for this year during a conference of the National Railroad Construction and Maintenance Association.

The executives noted in their remarks that fueling their plans has been the availability of new federal grants for infrastructure projects.

Kristine Storm, Genesee & Wyoming’s vice president, procurement, said plans include replacement of 875,000 ties and 437 miles of rail.

G&W infrastructure spending for 2023 is $473 million, up from $410 million in 2022. The distribution of the engineering and mechanical funds will see 31 percent go to ties, 22 percent to rail, 12 percent to mechanical, 10 percent to surfacing, 8 percent to bridges, and the remainder to six other categories.

Other work to be done this year includes more than, 2,000 miles of track surfacing, $45 million in bridge work, replacement of 90 turnouts, rebuilding more than 300 grade crossings, and more than 100 new grade crossing signals.

G&W plans to install 54,000 feet of new track in six sidings and two yard projects.

Watco expects to increase spending on maintenance capital from $97.2 million in 2022 to $132 million in 2023.

Tom Holmes, Watco’s vice president, purchasing and materials, said that will include $42.1 million for ties and surfacing, and $12.5 million for bridges.

Watco has been awarded $155 million in Consolidated Rail Infrastructure and Safety Improvement grants with five of those grants devoted to rail infrasture projects. The other grant is for a battery locomotive project.

OmniTRAX plans to allot 80 percent of its capital budget to track, crossings, and signals. Bridges will receive half of the remaining funds, with 6 percent for buildings, 3 percent for locomotives and 1 percent for other items.

Groups Seek AC Passenger Service Resumption

A Canadian First Nation group hopes to work with short line operator Watco on restoring rail passenger service to the former Algoma Central in Ontario.

The Missanbie Cree First Nation wants to see the service restored over 296 miles between Sault Ste. Marie and Hearst.

Scheduled passenger service on that route ended in 2015 after then owner Canadian National was unable to find a suitable contractor to operate the service.

Another passenger operation on a 114-mile portion of the route, the seasonal Agawa Canyon tourist train, did continue operating on the former Algoma Central, but was cancelled in 2020 due to the COVID-19 pandemic.

It is unclear if Watco will allow that train to continue and tourism officials in Sault Ste. Marie are hoping to meet with Watco officials about the matter next month.

The chief of the Missanabie Cree, Jason Gauthier, also hopes to meet with Watco officials about restoration of passenger service to Hearst.

He noted that when Watco announced in 2021 that it would acquire the former Algoma Central from CN that the Missanbie Cree signed a memorandum of understanding about its desire to restore passenger service to Hearst from Sault Ste. Marie.

Watco acquired the former Algoma Central as part of a transaction that included picking up former Wisconsin Central lines in Michigan and Wisconsin.

Gauthier wants the Canadian government to spend C$2 million on underwriting the Hearst service. He said other groups also are also pushing for the federal funding.

“We are known for doing things in the long haul, so these delays are not surprising to us. I know we will get through it,” he Gauthier told the Sault Star.

Watco to Take Over CN lines Jan. 29

Watco Company said it plans to assume control of several Canadian National branches in Michigan, Wisconsin and Ontario on Jan. 29.

Many of the branches were formerly operated by the Wisconsin Central, which CN acquired on Jan. 30, 2001.

All of the 142 miles of tackage in Michigan is located in the state’s upper peninsula and will be operated by Grand Elk Railroad, which already operates lines in the lower peninsula.

Grand Elk will base its operations in Newberry, Michigan, and use two GP38 locomotives. It will employ five workers.

In Wisconsin, the Fox Valley & Lake Superior will operate 329 miles of track, employ 27 and use eight locomotives, six SD40-2s and two GP40-3s.

In Ontario, Watco will operate on former Algoma Central track between Sault Ste. Marie and Oba.

Passengers excursion trains through the Agawa Canyon will be reinstated, the short line holding company said.

Watco Gets STB OK to Acquire Lines From CN

Short line operator Watco has gained approval by the U.S. Surface Transportation Board to acquire hundreds of miles of former Wisconsin Central track in Ontario, Wisconsin and Michigan.

Watco plans to incorporate the track into its Grand Elk Railroad and a new railroad to be named Fox Valley & Lake Superior.

The track, which is being purchased from Canadian National, includes the former Algoma Central in Ontario and various branch lines in Michigan and Wisconsin once operated by WC.

Watco has indicated that it already has equipment and personnel in place to begin operating the routes once the acquisition gained regulatory approval.

The STB earlier this year had delayed the transaction after hearing concerns from some shippers. Those concerns have since been addressed, Watco officials said.

 “The Board received numerous comments supporting the transactions and numerous comments opposing it,” the STB wrote in a decision allowing the sale to go forth. “After careful consideration of all comments received, the Board finds that the issues raised do not demonstrate regulation is necessary to carry out the rail transportation policy and that it is appropriate to allow Watco to proceed with the exemption process.”

Watco to buy CN Branch Lines

Short line operator Watco will buy 650 miles of branch line track in Michigan, Wisconsin and Ontario from Canadian National.

Watco will also begin operating the Agawa Canyon Train, which will use 250 miles of track the short line company is buying between Sault Ste. Marie and Oba, Ontario.

It has signed a memorandum of understanding with the Missanabie Cree First Nation regarding forming a partnership to operate the Algoma Central Railway.

The Agawa Canyon Train offers one-day excursions over 114 miles north of Sault St. Marie.

Terms of the transaction were not disclosed. CN had been offering the affected line for sale since last July.

In the United States Watco is purchasing lines now operated by CN affiliate Wisconsin Central.

The acquisitions in the U.S. must be approved by the Surface Transportation Board approval.

Venture to Improve Rail Car Tracking

Norfolk Southern has joined with GATX Corporation, short liner operators Genesee & Wyoming and Watco, and Trinity Rail to create a technology platform that they say will help transform rail shipping.

In a news release, the companies said the newly-formed Rail Pulse will facilitate and accelerate the adoption of GPS and other telematics technology across the North American rail-car fleet.

Funding for the venture came from the Federal Railroad Administration, the state of Pennsylvania, and from the venture members, who collectively own nearly 20 percent of the North American rail car fleet.

They said in the news release that Rail Pulse seeks to improve safety by incorporating hand brake and impact data.

Rail Pulse also seeks to increase rail’s competitiveness relative to other modes by improving visibility into rail-car status, location and condition, which can contribute to rail-industry growth, they said.

Telematics capabilities will include data capture to support real-time track-level visibility, whether doors or hatches are open, whether the car is loaded or partially loaded, and other key performance metrics.

The venture offers a neutral, open-architecture, industry-wide rail-car telematics platform to make it easier to shop by rail and track rail shipments while ensuring the safety and security of proprietary car-owner data, the news release said..

Development of Rail Pulse partners will begin later this year and full implementation expected by the end of 2022.

Hallett Tower in Toledo Has Closed

The Ann Arbor crossed the Toledo Terminal at Hallett Tower on the north side of Toledo. This image was made in March 2013 and is looking north on the Ann Arbor.

Hallett Tower in Toledo closed on Friday, its dispatching duties having been shifted to a Watco Companies office in Pittsburg, Kansas.

Hallett, which once controlled the crossing of the “back side” of the former Toledo Terminal (now CSX) and Ann Arbor Railroad was the last interlocking tower still open in Toledo.

Until its closing, operators at Hallett had dispatched the AA from Osmer (north of Ann Arbor, Michigan) to Toledo.

That territory included a combination of centralized traffic control and track warrants.

Last April control of the interlocking controls at Hallett had been shifted to a CSX dispatching office in Jacksonville, Florida.

That change coincided with the replacement of signals by CSX at the junction.

Hallett Tower, located off Matzinger Road on the north side of Toledo, was the last interlocking tower still operating in Ohio.

“We used to hang orders for every northbound and southbound train on [what is now] CSX, and on the Ann Arbor we gave northbound trains orders while southbounds gave us their consists” — lists of their trains’ cars that were then given to yardmasters in nearby Ottawa Yard, said Larry Bohland in an interview with The Blade newspaper of Toledo.

Excluding drawbridge towers, as recently as 1994 there were eight open interlocking towers in Toledo controlling railroad junctions.

John Vance, the Ann Arbor general manager in Toledo, said that Hallett survived because neither the Ann Arbor, which owned the tower nor CSX, which paid two-thirds of its operating costs under a decades-long operating agreement, had a significant incentive to replace it.

Besides, the Ann Arbor would need dispatchers when it was spun off from the former Michigan Interstate Railroad in 1985 so Hallett Tower was tapped to serve that purpose.

Vance told the Blade that the tower building will remain standing for now to provide storage for the Ann Arbor’s signal department.

He said Watco is open to the idea of donating all or part of it to a museum.

Drawbridge Tower in Cleveland is still open with operators there raising and lowering the lift bridge over the Cuyahoga River under the direction of NS dispatchers in Atlanta, who also line the switches and signals there.

The four operators at Hallett were given the opportunity to transfer to the Kansas office, but all elected instead to take a severance payment.

New Short Line Takes over CSX Routes

The Decatur & Eastern Illinois Railroad began operations this past Sunday on former CSX tracks in western Indiana and east central Illinois.

The first train left Decatur, Illinois, en route to Paris, Illinois, using two leased locomotives, blue FURX GP38-2 5514 and WAMX 4002, a former Canadian National Railway GP40-2LW.

The new railroad is owned by Watco Companies and covers 126.7 miles of the former CSX Decatur Subdivision and the Danville Secondary.

The system extends from Decatur to Montezuma, Indiana. At Chrisman, Illinois, another route runs to Terre Haute, Indiana, via Paris.

The former route is ex-Baltimore & Ohio trackage that once stretched from Indianapolis to Springfield, Illinois. The latter route was once New York Central territory.

Connections for the D&EI include CSX at Terre Haute and Hillsdale, Indiana; the Eastern Illinois Railroad at Metcalf, Illinois; Union Pacific at Tuscola, Illinois; and Canadian National and Norfolk Southern at Decatur.

The D&EI will be based in Paris where many of the its customers are located.

The herald of the new railroad features an ear of corn framed by the outlines of Illinois and Indiana.

Watco Hopes to take Over CSX Routes in Early September

Two CSX routes in Indiana and Illinois are expected to begin operation in early September by subsidies of short-line operator Watco.

The Decatur & Eastern Illinois Railroad will take over the Decatur Subdivision in Illinois and the neighboring Danville Secondary in Indiana on or around Sept. 6, pending regulatory approval, Watco said in a filing with the Surface Transportation Board.

Watco recently landed the support of agricultural products company Archer Daniels Midland, which is one of the largest shippers in the territory.

ADM recently told the U.S. Suraface Transportation Board that it supports Watco’s big to buy 126.7 miles of track from CSX.

The sale also includes 3.6 miles of trackage rights on Canadian National (former Illinois Central) in Decatur, Illinois.

The Decatur Sub (nee Baltimore & Ohio) extends between Montezuma, Indiana, and Decatur. The Danville Secondary (nee New York Central) extends between Terre Haute, Indiana, and Olivet, Illinois, and includes the Paris Industrial Track in Paris, Illinois.

Watco projects revenue to top $5 million from the 14 customers currently served by CSX routes.

The STB filings do not disclose the sale price of the routes.

A Watco spokeswoman said the carrier plans to assign six GP38-2s to the routes. The company plans to hire four conductors, five engineers, a locomotive laborer, a track inspector, two track laborers, and two track foremen.

CSX put the routes up for sale last January.

WATCO Buying CSX Lines in Indiana, Illinois

Two CSX secondary routes in Indiana and Illinois are being acquired by Watco Companies.

The 126.7 miles of track involved in the transaction includes the Decatur and Danville Secondary subdivisions.

The routes are former Baltimore & Ohio and New York Central respectively.

Watco plans to name the property the Decatur & Eastern Illinois Railroad will be the new name for the 126.7 miles of track that Watco will acquire from CSX as the Class I railroad seeks to prune its network of lower-density, non-core routes.

The Decatur Subdivision extends from its namesake city in Illinois to Montezuma, Indiana. It once extended between Indianapolis and Springfield, Illinois.

The Danville Secondary runs from Terre Haute, Indiana, and Olivet, Illinois, and also includes the Paris Industrial Track in Paris, Illinois.

The track between Terre Haute and Paris once was part of the NYC’s Indianapolis-St. Louis mainline and hosted such crack passenger trains as the Southwestern Limited, Knickerbocker and Missourian.

The track north of Paris was a Central route that linked Northwest Indiana and Cairo, Illinois.

Watco has told the CSX union members who work on the affected lines that it will have employment opportunities in Decatur and Paris.

The Pittsburg, Kansas-based short line company is looking to hire four conductors, five engineers, a locomotive laborer, a track inspector, two track laborers and two track foremen.

CSX, which put the lines up for sale last January, expects the sale to close in early August.

Affected CSX employees who choose not to go to work for Watco, retire or resign, will be given the option of remaining with CSX.

Neither CSX or Watco disclosed the terms of the proposed sale.

Watco operates 38 short-line railroads in the United States with 5,100 miles of track. It also holds 31 industrial contract switching contracts.